Online Gambling: Types of Online Gambling & The Ethics of The Issue

By Adrienne Welch & Danielle Crowley

Gambling is a hobby that American consumers demand and it is now an international network online. There are many kinds of online gambling which are easy for anyone to access.The selection varies from online casinos, to sports books to even electronic stock trading. Although all these websites are enjoyed and even abused by many people, there are also several controversies on the issue.

There are two aspects to these dilemma: One being the issue of the government earning 0% tax money on all online gambling and the other problem is the groups who think it should be illegal because of moral reasons.This is especially a problem with Congress, who is trying to prohibit online gambling altogether. This website will provide information on the different types of gambling and the easy accessibility,accompanied with sample webpages to show how common they are. This webpage will also address the ethical issues of online gambling.

Types of Online Gambling

Free on-line lotteries;

Sports books;

Race books;

Online Casinos;

Electronic stock trading sites;

Here is the document “The Review of the Socila and Economic Impacts of Gambling In the United States” written by Douglas M. Walker specially for SlotoZilla.

Figure 1:This graph shows a study by Bear Sterns in 2001 on the most popular types of online gambling

FREE ONLINE LOTTERIES: You can play online lotteries, sweepstakes and contests easily for free. These websites have different free online lotteries and it even rates them. Free Lotto is the one with the highest jackpot which is 10 million dollars. It’s easy to use online and it has an excellent website. They also have prizes of 10K, 100K and free car giveaways. Some other free online gambling websites include HotCashLotto with a jackpot of 1 million dollars, Box Lotto with a jackpot of 250,000, Lucky Surf, with 1 million and Money Balls also with 1 million jackpot.

SPORTS BOOKS: One form of online gambling is through sporting events. It is easy online to find sites with sports books. On these sites you can bet on any major sporting event taking place or even events in the future, such as a world series.Games that can be wagered upon include: college and professional basketball, professional baseball, college and professional football, professional hockey, amateur and professional soccer, cricket, and rugby. One of the links is run out of Australia, and they also keep up with college events. It’s as easy as two clicks to make major bets online over any event.

RACE BOOKS: Over the past two decades casinos and the internet have taken away from horse racing, causing many people to be out of jobs and taking $3 million away from our economy, causing a problem with legislative problem of replacing the missing revenue. One of the solutions to the problem was to just install slot machines at the track to draw a bigger crowd in. Some tracks also allowed call in betting to games on television. After these measures were taken they still had to do something to help the horse race industry, so of course they had to start putting the races on the internet and have online gambling.

ONLINE CASINOS: To make online gambling feel like a real casino environment, some websites provide screenshots of the inside of the casino you are pretending to be at. They show a screenshot with a link to “enter the room”. These casinos are more than easy to locate online and they are very exciting and convenient to the consumer.

Figure 2: An example of a screenshot of an online casino

ELECTRONIC STOCK TRADING SITES: Electronic stock trading is a whole new aspect to online gambling. It’s leaning more toward online investing and there are so many sites to choose from. Another type of online money trading that is easily accessible.

The Process and the Laws of Online Gambling

Within minutes, the average American will be able to use a link online to a casino and open an account page. You provide your banking information so the casino knows where to deposit your winnings (if you win anything). Gambling money online can come from credit card, electronic check, certified check, money order, or even wire transfer. This will allow for most anyone to come up with some source of money to gamble with. Once the account is set up the user can begin to gamble. If the person wins a bet, the money will be deposited in their account and they have two choices:

1) Keep the account active to keep using for gambling
or
2) Close the account and have a check sent to them in the mail for the profit. If the bet results in a loss, then the funds will be deducted out of the account

Gambling can not be stopped without federal help. Before online gambling existed, congress passed three acts to stop criminal gambling across state lines and many people believe these laws should now be effective with online gambling. This is a big controversy as to whether these laws must be followed over the internet or not. Because of the dispute, Congress is working on a law that specifically targets the internet.

The first law that may be applied to online gambling is the Federal Interstate Wire Act, passed by Congress in 1961. To try to diminish gambling this prohibits the use of wire communication used for the transmission of bets or wagers and gambling information interstate and foreign commerce. Online gambling may be considered breaking this law but the way the act is written prevents it from being fully effective against online gambling. The way the act is worded it says that it applies to “persons in the business of betting,” which would mean it doesn’t apply to individual gamblers. The courts decided that that is a correct interpretation of the law. Many would then argue that the Act should apply to the operators of the internet casinos, but law enforcers have three things cleared before prosecution. The next question is if the Wire Act applies only to sports betting. Some believe it is because the Act prohibits “assisting in the placing of bets or wagers on any sporting event or contest.” However the next part of the Act states that it prohibits,”the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers.” This expands beyond just sports gambling. The third problem with the Act is location. Online you can’t always tell where someone is on the computer; they could be on legal grounds for gambling.

Ethics of Online Gambling

Although many debates take place regarding how to find a legal law or Act to banish online gambling, some people ask if it even needs to be regulated? One common issue brought up is that some people find problems with the morality of online gambling. A major concern is with regulation of the age of gamblers. It’s often impossible for webmasters to know the ages of people visiting their site, potentially allowing underage kids to be exposed to the gambling websites. Another issue that concerns regulators is addiction. This is more of a concern with online gambling because of the quickness and ease of the gambling. Statistics show that if you have to get up and go to a casino you won’t go as much, but if you just click on a website, then it will be likely that you gamble more frequently. Tom Grey director of the National Coalition Against Legalized Gambling (NCALG), speaks of addiction saying, as a form of entertainment, [is] a disease to five percent of the population that will entertain themselves into bankruptcy. So obviously, [with] entry into a home . . . the more available and accessible you make gambling, the more you compound the problem.”

Fraud is another big reason why regulators would want to put a stop to internet gambling. Internet gamblers can’t be assured the games they play are legitimate and they can’t be guaranteed a payoff. Some websites just take people’s credit card numbers, and some don’t have proper machinery. Because of the increase in popularity with online gambling, another complaint is by tax advocates. The state is missing out on taxes because they are unable to tax online gamblers unless they regulate online casino operators. Another loss results from the decrease in revenue in the solid casinos in the state borders, causing not only the state to lose even more tax income, but also devastating the actual casinos and it’s employees.

Visit http://www.cato.org/pubs/pas/pa-336es.html for a full twenty-five page article on the Policy Analysis that covers all aspects of online gambling.

Because their are so many different opinions and so many laws trying to control online gambling, it seems it will take a long time to alleviate the controversy. Until anything happens, online gambling will continue and most likely grow. Despite all the attempts to get rid of online gambling, it remains easy to gamble over the internet because of the abundance of websites due to the consumer demand.

Figure 3:This chart shows who is gambling online in terms of age, sex, and language

When “online gambling” was looked up on a Google USENET group search, many article of the same thread came up. One interesting category was “The State of Online Gambling” which had a thread of ten articles. All the articles contain information similar to the issues that have been addressed in this webpage; The Congress debate over prohibiting gambling, should it be regulated, the issue of fraud, and other moral points of view. The groups may be found in Google groups under the newsgroup rec.gambling.lottery. Another group of threads that came up actually contained gambling websites, proving how common they are.